Those considering refinancing or purchasing commercial property must make several important considerations during the process. While most transactions go smoothly, others are more complicated and require the assistance of a commercial real estate lawyer in Chicago. Below are several tips that may help clients prepare for closing.
Learn Lenders’ Requirements
Every lender has unique requirements for some transaction types. Even if a client frequently refinances commercial properties, they should understand lenders’ requirements from the beginning. In many cases, a client may need to act quickly to meet those requirements before the closing date. Lenders’ requirements may vary depending on the transaction amount.
Don’t Delay in Getting Subordination Agreements Signed
If a client purchases or refinances a commercial building with multiple occupants, they should learn the lender’s requirements for subordination agreements. Many lenders require tenants to sign subordination, attornment and non-disturbance agreements before closing can occur. The purpose of such an agreement is to define the terms of the tenant/lender relationship in the event of a foreclosure or default.
Take the Time to Get an Opinion of Counsel Letter
If the loan is for a sufficient amount, the lender may need an opinion of counsel document. This simply means the lender needs the attorney to review the document to determine if its provisions are enforceable and valid. The review process can be time-consuming and expensive for borrowers; therefore, they should find out upfront if the letter is required.
Find Out Who Can Sign at Closing
A company’s governance documents should be in order so the owner can determine who may sign closing documents. Getting signatures from a busy executive can be difficult, and the larger the company, the harder the process will be. Clients can make it easier by learning ahead of time whether they need to get written approval from all managers and LLC members. If the commercial real estate lawyer in Chicago must fulfill the requirement for opinion of counsel, they will probably require consent from all managers and members.
While many commercial real estate transactions are uncomplicated, some can become quite complex. By following the tips above and hiring a real estate attorney with Starr Bejgiert Zink & Rowells, a client can get through the closing process with minimal hassle and expense.